Coinipop presents- The Quick Guide to Understand Cryptocurrency Transaction Fees
If you’ve already done a transaction with bitcoin using Coinipop on any other exchange, you have probably noticed that there was a small transaction fee included. For example, if you were to send 1 BTC at this time, the recipient would receive approximately 0.99996 BTC, which means that approximately 0.0001 (BTC) would be paid into the transaction fee.
Introduction to Cryptocurrency Fees
Cryptocurrency fees can take many forms – network fees, wallet fees, and exchange fees, among others. But don’t worry, they won’t all be charged on your transactions. These fees are added to the value of the crypto for your transaction or deducted from the final cryptocurrency. The actual fees you pay vary depending on the network you use and its confirmation capacity. For example, sending BTC will result in different fees for transactions placed on the Ethereum or Litecoin network. In the case of bitcoin, the average transaction fees on its network have increased gradually over the years.
And yet these costs remain among the most attractive in the world today. In fact, Bitcoin’s payment settlement system and fees are just light years ahead of traditional systems like banks and third-party services like Western Union and MoneyGram. How else to explain the fact that transactions of a million dollars can be carried out on the bitcoin network for a paltry sum of less than $ 1?
Back in 2019, one of the bitcoin whale moved 44,000 BTC, worth just over $ 310 million at the time, to a different wallet with ridiculous transaction fees of only around 0.00004551 BTC ($ 0.32). Disconcerting to say the least! Suppose you used a traditional method like Western Union to wire $ 310 million… how much do you think the transaction fees will be? You will have to shell out more than $ 6 million easily and the transfer will certainly take several days, as each player in the network will take their share.
This is one of the most impressive use cases of Bitcoin in recent times and the type of development that can actually help people save money. This is why it is important to stay informed of the latest events in the cryptography industry outside the usual FUD (fear, uncertainty and doubt) broadcast by the main media.
Do I really have to pay a transaction fee?
Theoretically, no. Using bitcoin as an example, you don’t have to pay any transaction fees. In fact, since you can dictate the amount of fees you want to add for a given transaction, you can simply set the number to zero to avoid paying fees. Be aware that this can mean longer processing times for your transaction, especially on days when the network is particularly overwhelmed.
Fees are pretty much inevitable in the crypto space. Optimizing the net return on your cryptocurrency transactions means being aware of transaction fees and how they could affect your bottom line. In any case, it’s worth doing your research and opting for crypto exchange platforms that offer minimal and transparent fee structures like Coinipop. Check out our fee schedule and find out why Coinipop is among the leading crypto exchanges in Europe today.